New Zealand Law Society - Company officers liable for unpaid wages

Company officers liable for unpaid wages

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The Labour Inspectorate has successfully applied to have ‘company officers’ made personally liable for $138,800 in arrears in two separate cases, after the companies went into liquidation.

The wife of a Nando’s restaurant franchisee was found liable for the $70,000 the company owed in unpaid wages and holiday pay, when the company was liquidated and the director was declared bankrupt.

Corrado Ramada was the sole director and shareholder of Adamar No 2 Limited, the company associated with the Nando’s outlet in Henderson, west Auckland and his wife Kim Ramada was part of the management team overseeing payments to employees.

Eight migrant workers are owed money, with one employee owed more than $20,000.

Despite Mrs Ramada denying involvement in the company, the evidence provided led to the ERA ruling otherwise, leaving her personally liable for the outstanding debt.

In another case brought by the Inspectorate, the owner-operators of Indian retail clothing stores across Auckland, Neelam Ahuja, Chirag Ahuja and Rhythm Ahuja, were found personally liable for $68,780 in unpaid wages and holiday pay owed by their companies.

Four employees claimed the Ahuja family often paid in cash and asked them to sign time records stating they only worked 20 hours a week.

“The Labour Inspectorate does not tolerate employers, including company officers, who fail to meet their obligations as employers to provide at least a minimum wage and holiday pay,” says Regional Manager Loua Ward.

“In both of these cases the business owners had employed migrants, who may not have been fully aware of their rights as employees in New Zealand, and exploited them for personal gain.”

The Labour Inspectorate proved that the company officers had directed or authorised the default in payment, under section 234 of the Employment Relations Act.

That section ensures minimum employment entitlements are available to employees, even in situations where the employing companies are insolvent or otherwise unable to pay.

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